Microsoft Loses Big in Browser Infringement Case

A jury in a Chicago federal court handed Microsoft a whopping $521 million legal defeat yesterday after deciding that the company infringed on a Web browser-related patent that the University of California owns in part. The little-reported case centers on technologies that support browser add-ons such as plugins, applets, and ActiveX controls. The Regents of the University of California and inventors Cheong Ang, Michael Doyle, and David Martin were awarded the patent that protects this technology in 1998; Doyle left the university and started a company called Eolas Technologies, which became the exclusive licensee of the patented Web browser technology. Eolas originally sued Microsoft in 1999, and the Regents of the University of California joined the lawsuit a year later. According to the lawsuit, Microsoft infringed on Eolas' patent by including the patented technology in Microsoft Internet Explorer (IE) and various Windows versions starting with Windows 95. Microsoft argued in October 2001 that the Eolas patent wasn't universal and therefore didn't apply to IE and Microsoft's other products, which Microsoft developed independently. But a federal judge ruled in December 2001 that the patent applied broadly to any "embedded program object" that runs inside a Web browser and that Microsoft had to defend itself against the patent-infringement claims in court. The case eventually reached trial in mid-July; jury deliberations began last Friday and concluded yesterday. Other companies make technology that could fall under the broadly defined Eolas patent, including Netscape and Sun Microsystems, which developed browser plugins and Java applets, respectively. To date, however, Eolas has sued only Microsoft--a logical target, given the company's deep pockets. Eolas hasn't publicly commented on whether it plans to sue any other companies. Although the $521 million judgment might sound harsh, it falls well short of the $1.2 billion Eolas sought. But Microsoft says it will appeal the ruling. "We're confident the facts will support our position," a Microsoft spokesperson said late yesterday. "We believe the evidence will ultimately show that there was no infringement of any kind, and that the accused feature in our browser technology was developed by our own engineers based on pre-existing Microsoft technology."